Incentive Effects to Student Volunteers by Prospect Theory An Experiment on Student Volunteers in Finland

Abstract

This study explores the behavioral dynamics of student volunteers in Finland under varying financial incentive structures using Prospect Theory. By integrating theoretical modeling with experimental analysis, the research examines the interplay between intrinsic and extrinsic motivations, emphasizing psychological factors like loss aversion and subjective probability distortions. Four treatments were designed: no incentive, incentive only, incentive with penalties, and incentives with varied penalty probabilities. Key results show that intrinsic motivation is stronger when there are no external incentives. Yet, financial rewards make people more likely to participate, which could weaken intrinsic drive. According to the principle of loss aversion, punishments that were presented as losses received stronger reactions than rewards that were presented in the same manner. However, changing the penalty odds didn't affect contributions, proving that regulation certainty is more significant than probabilistic deterrents. The nuanced effects of rewards on motivation assist this study understand student volunteers. It means making volunteer guidelines that are practical while encouraging long-term participation. Sample size is one of the shortcomings that shows the need to do more study in areas such as cultural disparities and longitudinal studies.